My niece was, unfortunately, involved in car car accident a couple of weeks ago. She was, thankfully, only slightly injured, but her car has now been declared an insurance write-off by the insurance company.
Although she was completely blameless for the accident, with the woman who caused the accident admitting liability both to my niece and the police, now that the claim is being processed it would appear that my niece is likely to end up severely out of pocket due to an accident which was in now way her fault, and which, in my own opinion, she could not have possibly avoided.
The insurance company have valued her car at a very low figure, with no reasonable justification. In fact, at their valuation, my niece will not even receive enough money to pay off the loan which she took out to buy the car just over a year ago. Her loan still has three years to run, and she has informed me that the loan will have to be repaid early now that the car has been declared a total loss. This will mean she will still have to pay all four years of loan interest, even though she has only had the benefit of just over one year of it, because that is the contract which she originally agreed to.
The fact that she has, in effect, lost three years of her loan period due to this accident, does this mean that this money can be claimed from the third party's insurers as an uninsured loss? Also, can the difference between insurers valuation and amount she has still outstanding on her loan be similarly claimed?
Further, she has been told that, because she has been paying her insurance premium by monthly payments, since the car is being written-off she is now required to pay off all the remaining payments for the current years insurance. I believe that, to the best of my knowledge, this insurance will then be cancelled when the insurance payment for her car is received. This cost, which is approxinately £700, will be deducted from the insurance company's payout to my niece for the total loss. Is this what normally happens?
She is loosing this £700 due to the accident which wasn't her fault. Should this amount not also be added to the uninsured loss recovery claim?
My own feeling about this is that my niece is being ripped-off by the insurance companies and, also, by her so-called solicitor. I feel that if she still remains out of pocket after the "settlement" then she should sue to woman who caused the accident, not her insurance company, the woman herself, as my niece just cannot afford to be out of pocket due to the careless driving of this other woman.
Could anyone give me any advice or suggestions, please, on any of this. Perhaps you or someone you know might have been in a similar situation in the past, and can give me some guidance as to how my niece should proceed with this.
From my last conversation with her a few days ago, she has had more than enough of everything connected with this accident, is very stressed about it, and just wishes to bring the matter to a conclusion as quickly as possible. I said the insurance company will love you as this is just what they want you to do and settle the matter with as little fuss and minimum cost for themselves as possible.
Thank You.
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Insurance experts on here will give better info but for now-
When my car was written off by a tree, my insurance company tried to pay me about £1,000 less than I finally got. A local car dealer looked up the CAP value for me and I rang round a few garages to see what it would cost to replace the car. I then pointed out to the adjustor what it would cost me to purchase a similar model/year/mileage car. Yes, I still made a loss as the car was in really good condition and would have given me several more years service, but it was enough to replace it properly.
I do not understand how her insurance company can deduct anything from a payout from another drivers insurance company payout! The claim is from the other drivers insurance company, not hers, and from previous postings I believe your niece should be put back in the position she was in BEFORE the accident. I think she needs to chase the (other drivers) insurance company for a decent amount.
It seems to be normal practise to take the rest of the premiums in a lump sum, however, do check with her insurance company as she may well find that the insurance will transfer to her new car for the rest of the year.
Did she not get any form of insurance on the car loan for this eventuality, or illness etc?
Is the solicitor provided as part of the legal services for her car rescue company or insurance? Most of this can be done by her so why pay a solicitor? Is the solicitor one who specialises in insurance and/or car claims? Each seems to have a different speciality - one who is good at conveyancing may be no good in an employment dispute and so on.
Good luck!
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"Further, she has been told that, because she has been paying her insurance premium by monthly payments, since the car is being written-off she is now required to pay off all the remaining payments for the current years insurance. I believe that, to the best of my knowledge, this insurance will then be cancelled when the insurance payment for her car is received. This cost, which is approxinately £700, will be deducted from the insurance company's payout to my niece for the total loss. Is this what normally happens? "
When my Girlfriend's car got written off the insurance was transfered to the replacement car she bought.
This was also being paid monthly.
I don't think that you are allowed to cancel after a claim though.
Although, as the other driver and their insurance co. have admitted liability, I don't know if this is applicable.
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galaxy:
i.m.o. if the third party has admitted liability,
1. i would not involve the first party's insurance.
2. i would get a good accident-claims chasing firm of lawyers to fight for every loss/damage suffered by the first party due to the admitted negligence of the third party. (look up yellow pages for no fault accident claims, and note that some motoring organisations will provide this service for you).
3. if i did use first party's insurance, i would check whether i have legal cover and use that seervice to get my full settlement.
4 see hj's faq no.40 (from the menu on the left column www.honestjohn.co.uk/faq/faq.htm?id=58 )
5. on the right, under your name, use the "forum search" to find in "discussion" within " 1 year" threads that contain the words " valuation insurance ombudsman ".
you should be able to find this quote
"Usually the policy provides for payment of the ' market value' of the vehicle (or words to that effect). How do we establish that? So far as the Bureau is concerned, two points are now clear. First, that market value is not the second-hand value of the car (unless the policyholder was in fact intending to sell it before it was stolen or written off) but what a replacement of similar age, condition and so on would cost. Second, [See: VALUATION OF MOTOR VEHICLES para 2] there are different markets. The appropriate one is not, as insurers often assume, the market for private sale and purchase of vehicles, through newspaper ads and the like, unless there is evidence to suggest that that is the market in which the policyholder intends to buy a replacement. As a general rule, the appropriate market will be the public one, so the policyholder gets what it would cost to replace the vehicle through a motor dealer. How do we find out what that would be? All relevant evidence has to be considered, but in particular we have to rely on standard trade guides! "
also, search here: www.financial-ombudsman.org.uk/ for "car valuation"
and one link found should include this
www.financial-ombudsman.org.uk/publications/ombuds...m
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This will mean she will still have to pay all four years of loan interest, even though she has only had the benefit of just over one year of it, because that is the contract which she originally agreed to.
What sort of loan has she got - the normal drill (law, I think) is that a loan can be repaid at any time, with a penalty of just 2 months interest. This doesn't apply if the loan is over £25K.
Further, she has been told that, because she has been paying her insurance premium by monthly payments, since the car is being written-off she is now required to pay off all the remaining payments for the current years insurance.
I would expect that - the key is that she's paying her annual insurance premium by monthly installments, she's not buying month by month insurance. The insurance company may accept a cancellation of the policy, but the refund is assesed on a sliding scale such that you'd typically get nothing back if you cancelled an annual policy at 6 months.
My own feeling about this is that my niece is being ripped-off by the insurance companies
Is the claim being handled through her own insurance company? If they're going to recover all their costs from the third party then there's no logic in them being stingy.
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The insuarnce Co will pay "the value of the cars" that was written off. The true value might not be their first offer but in the end you / they have to agree a figure for the car in £££'s
The fact that your daughter owes more to a finance company than the car is worth is the owner's responsibility.
If the owner had bought GAP insurance the difference would have been made up.
Whether GAP insurance is good value is open to question B4 you have an accident - after an accident is is very clear.
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>>She was, thankfully, only slightly injured,
I trust that she is making some level of claim for this injury ? Her solictor should be advising her and this might cover any shortfall on her ability to pay the loan.
>but her car has now been declared an insurance write-off by the insurance company.
Her own insurer or the thrd party's ?
>>The insurance company have valued her car at a very low figure, with no reasonable justification.
As a start how does their valuation compare to what garages in your area are selling comparable vehicles for on their forecourt ? Check the local paper or drive around.
>>In fact, at their valuation, my niece will not even receive enough money to pay off the loan which she took out to buy the car just over a year ago.
Not relevant.
But as an aside why didn't she consider what would happen if the vehicle was a total loss ? She should have done and this is a rough way to elarn a lesson, but was someone not advising her ?
>>The fact that she has, in effect, lost three years of her loan period due to this accident, does this mean that this money can be claimed from the third party's insurers as an uninsured loss?
Typically no.
>>Also, can the difference between insurers valuation and amount she has still outstanding on her loan be similarly claimed?
Typically no.
>>Further, she has been told that, because she has been paying her insurance premium by monthly payments, since the car is being written-off she is now required to pay off all the remaining payments for the current years insurance.
That woiuld be normal busines spractice. Equally one would expect them to swap the insruance to another vehicle with little or no charge.
>>She is loosing this £700 due to the accident which wasn't her fault. Should this amount not also be added to the uninsured loss recovery claim?
Typically no. However, one would expect her not to lose this amount if the accident is deemed to be the TP fault and your niece recovers all uninsured losses. I would then be asking her insurer to offer a credit for that sum.
>My own feeling about this is that my niece is being ripped-off by the insurance companies and, also, by her so-called solicitor.
Well, she's not being ripped off but she is certainly being dealt with harshly. Is there a broker involved, that's usually the issue. I think you might want to get the full story of the advice the solictor is offering includng the full extent of the uninsured loss claim. If its not gone too far she is likely to do better finaincially if she withdraws the claim from her own insurer and then pursues it with the TP insurer. That will negate the loss of the £700 period of insruance, for example.
>>I feel that if she still remains out of pocket after the "settlement" then she should sue to woman who caused the accident, not her insurance company, the woman herself, as my niece just cannot afford to be out of pocket due to the careless driving of this other woman.
You need to be careful about what you regards an out of pocket expense, but certainly flinging summons around at third parties can be a very productive way of resolving issues. Just make sure you've asked politely before getting heavy - we all have accidents and none of us like being treated heavy-handedly.
>Could anyone give me any advice or suggestions,
You go and talk to the solictor. Get some decent advice, and if you don't like what ytou're being told, or feel comfortable with their competence, then go and get another solicitor.
A slight note or warning is that in these cases it is frequently that someone like your niece is not listening to what she's being told carefully enough, so watch the bull in the china shop approach.
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Thank you all for your much valued replies, and special thanks go to No FM2R who has given very concise and practical advice, which I greatly respect and will certainly act upon and/or pass onto my niece.
Just to answer the questions you have posed:
>>She was, thankfully, only slightly injured, I trust that she is making some level of claim for this injury ? Her solictor should be advising her and this might cover any shortfall on her ability to pay the loan.
Yes, this appears to be the only part of her claim which is presently being dealt with in anything like a satisfactory way.
>but her car has now been declared an insurance write-off by the insurance company. Her own insurer or the thrd party's ?
The third party's, I understand. I cannot name the company on here as you will know!
>>The insurance company have valued her car at a very low figure, with no reasonable justification. As a start how does their valuation compare to what garages in your area are selling comparable vehicles for on their forecourt ?
Whilst I accept that forecourt prices cannot necessarily be used as a complete guide, due to prices being inflated to account for part-exchanges, etc, in my opinion, from other similar cars I have seen advertised, she shouldn't be getting less than £5,000 for her car. She has, to date, been offered £4,100, and, quite honestly, I really can't see this being significantly increased. What she has been offered is a trade price, or what you would pay at auction for one.
Check the local paper or drive around.>>In fact, at their valuation, my niece will not even receive enough money to pay off the loan which she took out to buy the car just over a year ago. Not relevant. But as an aside why didn't she consider what would happen if the vehicle was a total loss ? She should have done and this is a rough way to elarn a lesson, but was someone not advising her ?
Fair comment, but it all costs money. I take it you mean gap insurance, or similar. OK, it appears she stands a very good chance of loosing out now after what has happened, but I've been driving for over 35 years and have never had a car written off yet. It's all a matter of chance, which is what insurance companys operate on.>>The fact that she has, in effect, lost three years of her loan period due to this accident, does this mean that this money can be claimed from the third party's insurers as an uninsured loss? etc....
Again, good advice and fair comment. Biggest problem now is because my niece is, quite understandably, so very stressed out and upset about all of this she is very inclined to accept whatever's offered to her regardlesss, just to draw an end to the situation.
This is, of course, exactly what the third party's insurers want her to do!
Thank you once again for your excellent and experienced advice.
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In an ideal world...
Tell your own insurer that the accident has happened, but the information is just that and there will be no claim.
Fight with the TP over a payout for the car. Issue summns against their insured if you think it will help, supply local advertisments for car, be generally persistent.
Claim for loss of use (certainly busses, taxis, potentialy replacement car depending on circumstances
Claim for all expenses. You can allocate a cost to your time. Don't forget stamps, phone bills, etc. etc.
Claim for injury - you need a good solicitor.
Get payout
Pay loan off
Make same mistake again and get another car on finance without protection
Inform your own insurer to swap the insurance to your new car
Your own insurer can ONLY cancel the insurance without refund if they have paid out on the write-off. They may refuse a refund or do it in accordance with their short period rates and insist you keep paying. don't give them an option, insure another vehicle on the same policy.
You can claim for closer to forecourt prices than you think. Dalglish has an excellent link to some pointers on the value that you may claim for. I cant' remember them myself but he'll be around sooner or later and will post them, I'm sure.
Even a good solicitor will need chasing on this side of things. But its worth doing. Just dont' trust anybody to do their job wihtout being chased, because they usually don't.
Get a good solictior, get your niece to calm down, settle down for a row and NEVER blink first.
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I had a problem with a third party insurance company some years ago.
My car suffered hit and run damage but, by a lucky chance, I was told who had done it. When I claimed for my uninsured loss and cost of a hire car, the company refused my claim for a hire car as I was in receipt of a car allowance. They maintained that this allowance covered the cost of the hire car. Anyway, I then wrote to them again itemising every journey to do with the accident, e.g. visits to police station to report it, visit to body shop for quote, etc. £1 for each letter that I wrote, plus cost of 'phone calls. They replied that my claim was not justified. I wrote again, with a revised claim for my extra letter, and gave them seven days to settle or I would seek legal redress. They again refuted my claim so I saw a solicitor. Within ten days they settled for the full amount.
Don't waver, and make sure you claim for all incidental expenses associated with the claim.
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